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In December 2014, in preparation for the year-end board presentation, Hilmi Guvenal (PMD 1993), shareholder and CEO of Turkasset, and Ilker Yoney, COO, sat down to discuss Turkasset’s five- and ten-year strategic plans. Since taking leadership of the company in 2009, Guvenal had supervised Turkasset’s growth from a single office of 20 people into a nationwide firm with over 300 employees at six different branches. By 2014, Turkasset had made a name for itself as a data-driven, customer-friendly collection agency. Nonetheless, the Turkasset board felt the company had managed to establish itself a customer-centric niche in the Turkish AMC market. However, Turkasset’s overall collection rates on acquired portfolios remained largely on a par with those of the competition. So, board members had yet to confirm whether the culture of prioritizing the customer had led to increased shareholder value.
The case describes the elements that help put together a customer-centric philosophy at Turkasset, an NPL management and collection agency in Turkey. The case describes the evolution the company went through in face of the pro- consumer era in financial markets and how it established itself a competitive angle through a customer-focus. The case provides the context for the students to identify the design elements underlying Turkasset’s operational design and helps them explore the link between customer focus in a collections business and employee training and empowerment, as well as analytics and IT. The case challenges the students to deliberate whether the amount collected through a soft-collections method over time justifies the investments in customer-centricity.

When does increased service quality competition lead to customer defection, and which customers are most likely to defect? Our empirical analysis of 82,235 customers exploits the varying competitive dynamics in 644 geographically isolated markets in which a nationwide retail bank conducted business over a five-year period. We find that customers defect at a higher rate from the incumbent following increased service quality (price) competition only when the incumbent offers high (low) quality service relative to existing competitors in a local market. We provide evidence that these results are due to a sorting effect, whereby firms trade off service quality and price, and in turn, the incumbent attracts service (price) sensitive customers in markets where it has supplied relatively high (low) levels of service quality in the past. Furthermore, we show that it is the high-quality incumbent's most profitable customers who are the most attracted by superior quality alternatives. Our results appear to have long-run implications whereby sustaining a high level of service quality is associated with the incumbent attracting and retaining more profitable customers over time.